In overlaid pavements, working cracks in existing pavement systems propagate upward to the new pavement surface and cause reflective cracking, one of the most serious causes of deterioration in overlay systems. Several techniques to reduce reflective cracking have been introduced. However, the reflective cracking mechanism is not yet well understood. Fracture mechanics have been applied in pavement analysis to investigate crack development. A single-edge notched beam test was simulated with the finite element method with the cohesive zone model, which has been widely used to simulate a cohesive crack. The effects of steel reinforcement, interface, and hot-mix asphalt (MMA) properties on crack initiation time and crack propagation rate were investigated. A damage value, an indication of the degradation of the initial stiffness of the material in cohesive elements, was used to define the degree of softening and to trace crack formation. On the basis of elastic analysis, the crack initiation time for the reinforced beam was five times greater than that of the unreinforced beam, and crack propagation rate was reduced by two and one half to six times at -10°C. Conversely, when viscoelastic analysis, which is a more realistic simulation of HMA behavior, is used, the improvement in controlling reflective cracking is approximately half the improvement for the same loading and temperature conditions. This improvement depends on shear stiffness at the interface, crack length, and HMA temperature. In general, steel reinforcement, when installed properly, enhanced the resistance to reflective cracking.